In Brief:
- The U.S. SEC plans to strengthen crypto regulatory enforcement this year.
- SEC Chair Gary Gensler suggested that if anything is raising funds from the people, it could fulfill the definition of security.
- Gensler added that the crypto business needed to register with the SEC if it wanted to continue raising funds.
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler stated that the institution aims to strengthen regulatory enforcement in the crypto industry in 2022.
At a CNBC Squawk Box interview, Gensler restated his position on the importance of regulatory compliance in the cryptocurrency market.
Gary Gensler didn’t comment on whether he thinks if Ethereum is a security or not today, but he did suggest that if someone or anything is raising funds from the people, it could fulfill the definition of security.
“We don’t get involved in these types of public forums talking about any one project, one possible circumstance or give legal advice over the airwaves that way,” Gensler added.
An asset fulfills the definition of a security under US law if it is a monetary investment in a common enterprise with the expectation of profit depending on that enterprise’s efforts.
According to Gensler, every crypto project that raises funds from the public must comply with the US Security Act.
“I won’t comment on any one project. But you raised an important point. Crypto tokens, I will call them, are raising money from the public. And are they sharing with the public the same set of disclosures that helps the public decide and are complying with truth in advertising?” Gensler added.
Full information disclosure, according to Gensler, is the most important aspect of the crypto industry’s compliance with securities regulations.
Gensler agreed that the crypto business was innovative, but that it needed to register with the SEC if it wanted to continue raising funds from the general public.
Many crypto projects would argue that they are not securities, but “the facts and circumstances suggest that they are investment contracts, they’re securities, and they should register,” Gensler says.
The community has constantly pointed out that the SEC should be more open and lenient about crypto assets regulations. SEC Commissioner Elad Roisman who is set to resign by the end of January and commissioner Hester Peirce, also known as ‘Crypto Mom’, are outspoken opponents of SEC Chairman Gary Gensler’s visions regarding crypto.
